Major Job Sites Feature Ads With Salaries Below Minimum Wage

Recent minimum wage research has discovered that many roles advertised on major job sites offer less than the UK’s National Living Wage. This would constitute a breach of workers’ rights; however, the TUC is concerned by the prevalence of such practices.

In this article, we consider the research findings in a little more detail. We also explore important points for employers to consider, and what employees can do about an underpayment of wages.

Recent Concerns Over Job Ads Offering Below Minimum Wage

A recent study by the Trade Unions Congress has shown that many popular job sites are advertising roles with salaries below minimum wage. The research also shows, that on a single day in July 2024, 46 jobs on Indeed, CV-Library, and Reed did not comply with minimum wage requirements. 26 of these positions required experience and seven required degrees or professional certification.

All three job sites have responded to the TUC’s research findings. Each has highlighted the importance of minimum wage compliance and has denied condoning alternative practices. All have referenced measures intended to flag non-compliant postings for moderation, although these seem to depend heavily on AI systems.

However, CV-Library states, “There may be jobs with a salary range advertised with a lower end above the National Minimum Wage but below the National Living Wage… This is where an employer is open to hiring workers under 21 and would adjust salary based on their age while remaining compliant.”

The TUC is now urging the government to address this issue in its New Deal for Working People. It has recommended tougher penalties for non-compliance with minimum wage requirements and more stringent enforcement processes.

The TUC’s general secretary, Paul Nowak, has expressed disappointment with the findings. He stated: “Workers are not the only victims. These pay cheats undercut all those good employers who do the right thing. And that creates unfair competition.”

Deputy chief executive of the Recruitment and Employment Confederation, Kate Shoesmith, agrees with the TUC’s response. “National Minimum Wage rates should always be paid, and the vast majority of businesses do just that […] Where there is genuine bad practice, this needs to be stamped out”, she says.

Considerations for Employers Regarding Minimum Wage Compliance

Calculating Minimum Wages

Employers are obliged under UK law to pay their workers the National Minimum Wage or National Living Wage, as appropriate to their age. Failure to do so constitutes a criminal offence and a breach of the workers’ legal rights. It will be the employer’s responsibility to ensure that a worker’s wages are calculated correctly to meet minimum wage requirements.

Certain payments should not be included when calculating a worker’s minimum wage. Specifically, these are payments for the employer’s use or benefit, payments which the worker made towards things for the job which have not been refunded, tips and service charges, and extra pay for working unsociable hours.

Conversely, other payments should be included in the calculation of a worker’s minimum wage. These include income tax and National Insurance contributions, wage advances or loans (or repayment of same), repayment of overpaid wages, and penalty charges for a worker’s misconduct.

Keeping Records of Wage Payments

Employers are also obliged to keep records to prove they are paying their workers a minimum wage. These can be in any format but must cover an individual pay reference period in a single document. Pay reference periods are usually determined by how often a worker is paid (weekly/monthly) and cannot be longer than 31 days.

Records should also include any agreements about a worker’s working hours, pay, and conditions (such as contracts of employment) and any documents showing that a worker is not entitled to a minimum wage. Before 1 April 2021, these records had to be kept for three years. Since 1 April 2021, they are required to be kept for six years.

If it is discovered that an employer has failed to pay a worker the minimum wage to which they are legally entitled, they will be obliged to pay the shortfall immediately. If an employer fails to do this, they might expect further action for the underpayment of wages.

Potential Consequences of Breaches

Officers of His Majesty’s Revenue and Customs (HMRC) have the power to investigate employers and review their payment records. They can also impose penalties if an employer has failed to comply with minimum wage requirements. These may include fines of up to £20,000 plus £100 per worker and naming and shaming, which can have significant financial and reputational effects respectively.

Workers who have not been paid the minimum wage to which they are entitled may also choose to bring a claim against their employer directly for underpayment of wages. In such a situation, the Employment Tribunal is likely to order the employer to pay the arrears plus interest.

It is also important to consider the impact which not paying a minimum wage may have on recruitment going forward. Reputational damage from being named and shamed by HMRC or following an Employment Tribunal may make an employer unattractive to prospective employees.

In addition, advertising positions at lower rates of pay, even if these comply with the National Minimum Wage, have the potential to exclude older candidates. This could in turn constitute indirect age discrimination against candidates aged 21 or over. This could result in further legal action from prospective candidates.

Legal Rights of Workers Regarding Minimum Wage

Most workers in the UK are entitled to receive the appropriate minimum wage for their age and role. Those who believe they have experienced an underpayment of wages should raise the matter with their employer initially. Workers have the right to inspect and take copies of their pay records and to be accompanied while they do so. Such a request should be made to the employer in writing.

If a worker has been paid less than their minimum wage, the employer will be required to pay them any arrears immediately. If they do not do so, workers may choose to raise a formal grievance against their employer. They may also consider reporting their employer to HMRC. HMRC may then choose to investigate the employer on the worker’s behalf and impose financial sanctions.

Workers may also choose to bring a claim against their employer in the Employment Tribunal. However, there are strict time limits to bring such a claim. Claims must be brought within three months minus one day from the date of the most recent inaccurate payment. Tribunals can order payment of arrears for up to two years.

If you believe that you are not receiving your entitled minimum wage or have suffered a detriment from your employer because of this, Redmans Solicitors can help. Contact us today and one of our friendly employment law experts will be pleased to advise you on your payment rights and what steps you might choose to take to ensure these are upheld.

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